SECURITIES AND EXCHANGE COMMISSION
                        WASHINGTON, D. C. 20549

                             FORM 10-KSB
                             (Mark One)
        [X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                    SECURITIES EXCHANGE ACT OF 1934

                 For the year ended December 31, 2004

                     Commission File No. 0-19047


                     FOOD TECHNOLOGY SERVICE, INC.
           (Exact name of Registrant as specified in its charter)

                FLORIDA                                    59-2618503
   (State of incorporation or organization)   (Employer Identification Number)

   502 Prairie Mine Road, Mulberry, FL         33860
   (Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (863)425-0039
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Common Stock, $.01
par value

    Indicate by check mark whether the Registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

                            Yes               No
                             X
                           -----             -----

    Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-B is not contained herein, and no disclosure will be
contained, to the best of Registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-KSB or any amendment to this Form 10-KSB.  [ ]

    The Registrant's operating revenues for its most recent fiscal year were
$1,318,268.

    As of December 31, 2004, 11,001,038 shares of the Registrant's Common Stock
were outstanding, and the aggregate market value of the voting stock held by
non-affiliates (7,234,455 shares) was approximately $9,187,750 based on the
market price at that date.


                    DOCUMENTS INCORPORATED BY REFERENCE

     Proxy Statement for the Annual Meeting of Shareholders scheduled to be
held May 25, 2005.


                       TABLE OF CONTENTS


PART I

Item 1     Description of Business

Item 2     Description of Properties

Item 3     Legal Proceedings

Item 4     Submission of Matters to a Vote of Security Holders

PART II

Item 5     Market for Common Equity and Related Stockholder Matters

Item 6     Management's Discussion and Analysis

Item 7     Financial Statements

Item 8     Changes in and Disagreements with Accountants on
           Accounting and Financial Disclosure

Item 8(a)  Controls and Procedures

PART III

Item 9     Directors, Executive Officers, Promoters and Control Persons;
           Compliance with Section 16(a) of the Exchange Act

Item 10    Executive Compensation

Item 11    Security Ownership of Certain Beneficial Owners and Management and
           Related Stockholder Matters

Item 12    Certain Relationships and Related Transactions

Item 13    Exhibits and Reports on Form 8-K

Item 14    Principle Accounting Fees and Services
















                              PART I

Item 1.   Description of Business

     Food Technology Service, Inc., (the "Company") was organized as a
Florida corporation on December 11, 1985.  The Company owns and
operates an irradiation facility located in Mulberry, Florida, that uses
Gamma radiation produced by Cobalt 60.  The Company provides contract
sterilization service to the medical device, food and pharmaceutical
industries.  The Company also processes packaging, spices and ingredients.

     The benefits of irradiation in preventing food-borne illness are well
known.  Food irradiation is supported by the USDA, the World Health
Organization, the United States Public Health Service, the American Medical
Association, the Institute of Food Technologists, and reputable scientific and
medical organizations throughout America.  In addition, more than forty
countries have approved the irradiation of food products.  The FDA has
approved irradiation as a safe and effective means of processing a variety of
foods.  To date, the FDA has approved the irradiation of (i) pork, to control
trichinosis; (ii) poultry and shell eggs, for the control of disease causing
pathogens; (iii) spices, for sterilization;(iv) fresh fruits and vegetables for
insect disinfestation, and to delay maturation, which extends the shelf life of
many fresh fruits and vegetables; and (v) some meat to control pathogens and
extend shelf life.

     Although the Company is dedicated to the irradiation of poultry, meats
and other food products, until acceptance by the public, the Company has and
will continue to irradiate other products.  The Company's revenue for 2004
(approximately $1,318,268) resulted primarily from the processing of
packaging, medical products and consumer goods. Although the Company continues
to diversify its customer base three customers accounted for approximately
56% of revenues in 2004.

     Management is working diligently with the food industry to gain consumer
acceptance for irradiated products. The Company also continues to work with
the medical device and product industry in Florida to offer its gamma
irradiation technology as a means of sterilization. The Company presently
irradiates meat under a special FDA approval for the NASA Astronauts. There
are currently several petitions awaiting FDA approval. The shellfish industry
is waiting for FDA approval for shellfish. The Food Processors Association
(FPA) has petitioned the FDA to allow the irradiation of processed meats to
control Listeria. The FPA has also petitioned the FDA to raise the maximum
dose allowed for poultry and remove the requirement for non-barrier packaging
for poultry.

     The Company provides research and development and offers testing to find
new applications for gamma irradiation technology.

Processing Plant Operations

Procedures

     Products to be irradiated are placed onto the conveying system.  Some
products, because of their density and pallet size, may have to be
depalletized for radiation processing to ensure that the appropriate
radiation dose is applied to the product.  The conveying system
automatically moves the product through the irradiation chamber at a
predetermined rate specified by the Company's personnel.  The
positioning of the product relative to the radiation source and the distance
of the product from the radiation source are fixed.  The proper radiation
dose is determined by the duration of the exposure of the product to the
radiation source, which is carefully controlled to provide the desired dose.
The exposure time required to achieve the desired dose will depend on the
amount of Cobalt 60 in use and the density of the material exposed.

     Similar to an airport x-ray system or a microwave oven, the irradiation
process does not make products radioactive.  Food is safe to eat immediately
after processing.  Likewise, medical products can be shipped immediately

without having to wait for dissipation of potentially dangerous gases that are
produced by other methods of sterilization.

     The total time required to process different products varies, primarily
reflecting (i) the different radiation doses required for different purposes
(e.g., insect disinfestations requires a lower dose than does elimination of
microorganisms), and (ii) the density of the product being irradiated.  A
higher or lower dose (but always within the range approved) can be applied by
increasing or decreasing the time of exposure of the food to the radioactive
source.  Dosimeters, which measure the level of irradiation, are placed in and
around the product being irradiated, and they allow the Company's personnel to
ensure that proper levels have been achieved.  With the addition of
refrigeration inside the facility, and the current supply of Cobalt 60, the
plant can handle any and all products in an efficient manner.

Personnel

     As of December 31, 2004, the Company had ten employees.

Cobalt 60 Supply

    The Company has in place approximately 1,098,729 curies of Cobalt 60. The
level of radioactivity of Cobalt 60 declines at approximately 1% per month,
and new Cobalt 60 must, from time to time, be purchased to maintain an
appropriate radiation level. The amount of Cobalt 60 maintained is
determined by the business needs of the Company. Nordion is the
Company's supplier of Cobalt 60 and has agreed to sell to the Company all
of its requirements for Cobalt 60, and to accept the return of all used
Cobalt 60 that have reached the end of its useful life.  Cobalt 60 is
available from several sources. See "Agreements with MDS Nordion"
below.

Plant Safety

Safety to Surrounding Community

     While a radiation source does require special handling, the necessary
precautions are well understood and practiced daily at the Company and
numerous other irradiation plants already in operation.

     The Company's irradiation processing activities will not produce harmful
solid, liquid or gas effluents or pollutants.


Safety to Plant Workers

     As a result of long experience in designing and operating similar types
of irradiation facilities, the necessary precautions for worker safety in an
irradiation facility are well understood.  These precautions are enforced by
several federal and state agencies in the United States.  The Bureau of
Radiation Control, Radioactive Materials Section of the Florida
Department of Health inspects the facility on an annual basis.  The USDA
inspects the premises whenever the Company is processing meats or
poultry and the U.S. FDA inspects operations relating to both food and
medical items.

Regulatory Matters

     In the United States, primary responsibility for approval of food
irradiation rests with the FDA. No irradiated food can be sold, unless the
FDA has found that irradiation of a particular food, at specified doses, is
both safe and generally effective for the intended purpose.  To date, the
FDA has approved the irradiation of red meats, poultry and shell eggs for
the control of disease-causing microorganisms, the irradiation of all fresh
fruits and vegetables for insect disinfestation and shelf life extension, the
irradiation of spices for sterilization, and the irradiation of pork for the
control of trichinosis. Petitions for the approval of the irradiation of
shellfish and Ready-to-Eat luncheon meats are presently pending.

     In general, no further approvals are necessary for the sale of
irradiated fresh fruits and vegetables for shelf life extension or quarantine
treatment in the United States.  However, the shipment of any irradiated
food for export will be subject to the rules of the country of destination.
There have been illnesses caused by certain bacteria and parasites in fresh
foods and the dose level required for irradiation to provide safety from
these organisms is higher than currently allowed and will require an
additional approval from the FDA. Some states and countries require that
certain foods be quarantined on import to prevent the establishment or
spread of insects commonly carried by the food.  The Company has had
discussions with a number of parties regarding the use of irradiation for
fruit and vegetables for export and for shipment between the southern
states in the United States and has successfully irradiated products for
quarantine treatment that have been accepted by California and Texas.

     The USDA also regulates any processing of meat and poultry, whether for
irradiation, packaging or otherwise; and the Company is an USDA inspected
facility.  The USDA has promulgated rules relating to such processing to
ensure that the food remains safe and wholesome.  In general, such rules
establish standards for the implementation of the approval established by the
FDA, and relate to such matters as good handling and processing practices.
These rules deal with such matters as (i) minimum irradiation levels to assure
effective treatment; (ii) temperature standards to prevent thawing of frozen
foods; (iii) requirements for the separation of processed from non-processed
foods; and (iv) labeling requirements.  The USDA has already adopted
rules relating to irradiation processing of pork, poultry and red meat
products.

     The FDA regulates the irradiation of medical devices and similar
products.  The Company is regulated as a contract sterilizer with the
FDA.  Customers having medical products sterilized by the Company must
verify and document that the irradiation process sufficiently sterilizes
their products.


     The Company has obtained a license for the operation of its facility
from the Bureau of Radiation Control, Florida Department of Health,
which regulates the ownership and operation of all irradiation facilities
and equipment in the State of Florida (including, for example, hospital x-
ray equipment).  The agency monitors the facility's operations to make
certain that all safety regulations are being met.

Other Considerations

     The Company recognizes that it is seeking to extend the commercial
irradiation industry into new fields in the United States, and governmental
bodies may seek to impose on the Company and its business regulatory
requirements not now anticipated.  Currently, the transportation and sale
of irradiated foods is now permitted in all 50 states.  Although the
Company is not aware of any significant regulatory requirements
applicable to its proposed business, there can be no assurance that the
Company will not encounter unanticipated regulatory requirements.

Agreements with MDS Nordion

     The Company, in September 1990, entered into an agreement with MDS
Nordion whereby MDS Nordion agreed to provide irradiation equipment
and Cobalt 60 to the Company necessary to operate its irradiation facility.
In order to secure payment of the purchase price, additional loans and
future advances by MDS Nordion to the Company, the Company and
MDS Nordion executed a Convertible Debenture and Mortgage and
Security Agreement, both dated January 15, 1992.  The balance of the debt
at December 31, 2004 was $782,899. This balance consists of $463,194
US (the "Debt"), plus interest accruing at prime plus 1% to December 31,
2004 in the amount of $319,705.

     On October 22, 1991 the Company entered into a Reimbursement
and Indemnity Agreement with Nordion whereby Nordion assisted the
Company in obtaining a surety bond in the sum of $600,000 in order to
meet State of Florida facility permit bonding requirements.  In connection
therewith the Company agreed to reimburse Nordion for any liability and
expense which Nordion may sustain as a result of its commitments to the
bond issuer and secured such obligation under a Mortgage and Security
Agreement dated October 22, 1991.  The bond continues to be in effect.

     By agreements dated March 6, 2001, April 17, 2001, May 18, 2001 and
November 20, 2001, the Company and MDS Nordion agreed and further
confirmed that the Debt and any future advances, including payment of
guarantees or indemnities to third parties made by MDS Nordion for the
Company's benefit, shall be convertible at MDS Nordion's option, at any
time, into Common Stock of the Company.  The applicable conversion
rate is determined based on 70% of the closing price of the Company's
shares of Common Stock listed on NASDAQ, on the last trade date prior
to the exercise of the conversion right. Nordion has waived its rights to
convert interest accruing on the indebtedness from February 5, 2000 through
January 1, 2006.

     On February 4, 2000, in order to simplify and consolidate the existing
security interests securing repayment of the (i) debt and interest; (ii)
indemnity and reimbursement obligations arising from guarantees or
indemnities provided by MDS Nordion to third parties for the Company's
benefit; and (iii) fixture loans or advances, the Company and MDS
Nordion, entered into a new Mortgage and Security Agreement.
Substantially all of the assets of the Company continue to be pledged as
collateral against the obligations of the Company to MDS Nordion.

     In addition to Cobalt 60 purchased from MDS Nordion, MDS Nordion has
stored an additional amount of Cobalt 60 at the Company's facility in
anticipation of the Company's future needs.  At the end of 2004, there
were approximately 1,098,729 curies of Cobalt 60 both owned and stored at
the Company's facility. Title in and to 220,367 curies of Cobalt 60 located
at the facility remains the property of MDS Nordion and may be removed
by MDS Nordion at any time.

Item 2.   Description of Properties

     The Company's irradiation facility and executive office are located
on an approximately 4.33 acre site owned by the Company in Mulberry,
Polk County, Florida.  The Company purchased the site because of its
convenient access to State Road 60, a major transportation artery between
Central Florida near the major interstate systems.  Should the Company's
first facility prove successful, the site is sufficiently large to
add one or two additional irradiation chambers, thereby increasing the
capacity of the facility.

     The Company's irradiation facility and executive office comprise
approximately 28,800 square feet, including a 2,600 square foot
warehouse and loading and unloading area, a 3,200 square foot office area,
and a 3,000 square foot irradiation chamber and Cobalt 60 storage cell.
The Company's irradiation processing plant consists of a radiation source,
an automated conveying system and operating safety controls.  The heart
of the plant is the radiation source.  Within the processing chamber, a
water-filled pool, approximately 28 feet deep, is used to shield and store
the radiation source in the "off" position.  The pool is enclosed in a
radiation proof chamber, a double safeguard against the escape of any
radiant energy.  The concrete walls and roof of the processing chamber are
approximately 6 feet thick and, during the times that the source is out of
the pool in the "on" positions will provide safe shielding of adjacent areas
such as the control room, work floor, offices and outdoor grounds.  The
control room contains operating and safety controls.  The conveying
system is used to transport products to and from the processing chamber.
The Company's facility is designed to operate 24 hours per day, seven
days per week.  Although the Company currently has available
approximately 1,098,729 curies of Cobalt 60, the facility is designed to meet
international standards of radiation protection with an installed source of
7,000,000 curies.  The capacity of the source racks, however, will only
permit a maximum of 5,000,000 curies of Cobalt 60 to be installed.

     As indicated in Item 1, substantially all of the assets of the
Company are pledged as collateral against the obligation to Nordion.

Item 3.   Legal Proceedings

     On March 24, 2000, Pegasus Foods Canada, Inc. filed a lawsuit against the
Company alleging that certain seafood products irradiated by the Company were
adversely affected by the process.  The lawsuit alleged damages in excess of
$2,000,000 and lost profits in excess of $6,000,000.  The Company denied the
allegations and has vigorously defended the lawsuit. On February 23, 2004, the
Company executed a confidential settlement agreement with the plaintiff, which
in the opinion of counsel, concludes the litigation and protects the Company
against any significant financial exposure.

Item 4.   Submission of Matters to a Vote of Security Holders


     None

                                    PART II

Item 5.   Market for Registrant's Common Equity and Related Stockholder Matters

(a) The following table shows the range of closing bid prices for the Company's
    Common Stock in the NASDAQ SmallCap market for the calendar quarters
    indicated. The quotations represent prices in the over-the-counter market
    between dealers in securities, do not include retail mark-up, markdown, or
    commissions and do not necessarily represent actual transactions.

                                                        BID PRICES
                                                        ----------
         2003                                          High      Low
         ----                                          ----      ---
     First Quarter                                     $1.19   $ .80
     Second Quarter                                     1.20     .95
     Third Quarter                                      1.24     .80
     Fourth Quarter                                     1.40     .93



         2004                                          High      Low
         ----                                          ----      ---
     First Quarter                                     $2.65   $1.05
     Second Quarter                                     2.90    1.03
     Third Quarter                                      1.18     .71
     Fourth Quarter                                     2.70     .81

(b) As of December 31, 2004, the approximate number of beneficial holders
    of Common Stock of the Company was 3,500.

(c) The Company has paid no dividends to date and does not anticipate paying
    any for the foreseeable future.

Item 6.   Management's Discussion and Analysis

Plan of Operations

     The Company had revenues of $1,318,268 during 2004.  This compares to
revenues of $1,875,994 for the same period in 2003 and reflects a decrease of
approximately 30% between the two years.  As a result of this decrease in
revenues, the Company's operations reflected a loss of ($105,731) for 2004
compared to a profit of $397,480 for 2003.

     The Company has some customers that require irradiation intermittently
rather than incorporating irradiation into their production process.  All
other customers use the facility regularly and are considered base customers.
No intermittent customers required services during 2004, but one such customer
was responsible for revenue of $939,324 in 2003.  The absence of that
intermittent customer was responsible for the decreased revenues in 2004 as
compared to 2003.  The Company increased revenues from base customers in 2004
by $381,598.  This increase was reflected over all product categories.

     Processing costs decreased slightly from $385,177 in 2003 to $359,286 in
2004 due to lower labor costs associated with decreased production.  General
and administrative expenses also decreased slightly from $650,335 in 2003 to
$631,258 in 2004.  However, as a percentage of revenue, processing costs and
general and administrative expenses increased in 2004 from 20% to 27% and 35%
to 48%, respectively.  This was due to the decline in revenue in 2004 compared
to 2003.  Although there was some small variation of costs within individual
categories of expenses, overall processing costs and general and
administrative expenses are relatively fixed.  Depreciation increased slightly
from $380,446 in 2003 to $384,713 in 2004 because of the purchase of Cobalt
in March, 2003.  As a percent of revenue, depreciation increased from 20% in
2003 to 29% due primarily to the decrease in revenue.  Interest expense in
2004 was $48,742 versus $62,556 in 2003.  The decrease was due to debt
incurred and repaid in 2003 associated with the purchase of Cobalt.

     Although there is no assurance, management anticipates a return to
profitability during 2005.  Management does not anticipate any intermittent
customers requiring services in 2005.  However, several ground beef producers
became base customers during the second quarter of 2004 and 2005 revenues from
those customers should reflect a full year of service.  Similarly, demand for
irradiation of medical products and other items is increasing.  Management
does not anticipate any significant increases in actual processing costs,
general and administrative expenses or depreciation during 2005.  Interest
expense should decline in 2005 because the Company paid $200,000 in principal
during the fourth quarter of 2004 and anticipates additional payments on debt
owed to MDS Nordion during 2005.

Liquidity and Capital Resources
-------------------------------

     At December 31, 2004, the Company had cash on hand of approximately
$231,877 and accounts receivable of approximately $135,946.  At December 31,
2004, the Company's outstanding debt to MDS Nordion amounted to $782,899 which
is evidenced by a Note and Mortgage and Security Agreement.  The debt, which
includes interest of $319,705, bears interest at prime plus 1%.  Such debt is
due and payable on demand.

Item 7.    Financial Statements

     Reference is made to the Company's Financial Statements included
herewith.

Item 8.    Changes in and Disagreements with Accountants on
           Accounting and Financial Disclosure

     None.

Item 8(a) Controls and Procedures

     The Company's principal executive officer and principal financial officer
evaluated the Company's disclosure controls and procedures (as defined in Rule
13a-14(c) and 15d-14(c) under the Securities Exchange Act of 1934, as amended)
as of December 31, 2004 (the "Evaluation Date").  Based on that evaluation,
the principal executive officer and principal financial officer of the Company
concluded that, as of the Evaluation Date, the disclosure controls and
procedures, established by the Company, were adequate to ensure that
information required to be disclosed by the Company in reports that the
Company files under the Exchange Act, is recorded, processed, summarized and
reported on a timely basis in accordance with applicable rules and regulations.

     There were no changes in the internal controls over financial reporting
during the fourth quarter ended December 31, 2004 that have materially affected,
or is reasonably likely to materially affect, the Company's internal controls
over financial reporting.



                                    PART III

Item 9.   Directors, Executive Officers, Promoters and Control Persons;
          Compliance with Section 16(a) of the Exchange Act

Directors and Executive Officers of the Company.

    Reference is made to the Company's Proxy Statement to be used in
conjunction with the 2005 Annual Shareholders Meeting scheduled to be held on
May 25, 2005.

Item 10.   Executive Compensation

     Reference is made to the Company's Proxy Statement to be used in
conjunction with the 2005 Annual Shareholders Meeting scheduled to be held
on May 25, 2005.

Item 11.   Security Ownership of Certain Beneficial Owners and Management and

           Related Stockholder Matters

     Reference is made to the Company's Proxy Statement to be used in
conjunction with the 2005 Annual Shareholders Meeting scheduled to be held on
May 25, 2005.

Item 12.   Certain Relationships and Related Transactions

     See Item 1 Business-"Agreements with MDS Nordion."


Item 13.   Exhibits and Report on Form 8-K

   (a)  Exhibits
        --------
     (1) Articles of Incorporation. Reference is made to Exhibit 3.1
         included in the Company's Registration Statement on Form S-18
         (File No. 33-36838-A).
     (2) By-Laws. Reference is made to Exhibit 3.2 included in the
         Company's Registration Statement on Form S-18 (File No.
         33-36838-A).
    (10) Agreements entered into by the Company with MDS Nordion
              *(a) Reimbursement and Indemnity Agreement dated October 22, 1991
              *(b) Agreement dated December 11, 1991
              *(c) Debenture dated January 15, 1992
              *(d) Copy of Security & Mortgage Agreement dated January 15, 1992
              *(e) Financing Agreement dated February 21, 1992
              *(f) Security Agreement dated February 21, 1992
             **(g) Letter Agreement dated March 31, 1994 and April 13, 1994
            ***(h) Modification Agreement
    (14) Draft Code of Ethics****.
    (31) Rule 13a-14(a)/15d-14(a) Certifications*****
    (32) Section 1350 Certification*****

      * Reference is made to Exhibit (c)(3)included in the Company's Form
        10-KSB Report filed for the year ended December 31, 1991.

     ** Reference is made to Exhibit 10(g) included in the Company's Form
        10-KSB Report filed for the year ended December 31, 1994.

    *** Reference is made to Exhibit 10(h) included in the Company's Form
        10-KSB Report filed for the year ended December 31, 2000

   **** Reference is made to Exhibit 14 included in the Company's Form
        10-KSB Report filed for the year ended December 31, 2003

  ***** Filed herewith.

   (b) Reports on Form 8-K

         No reports on Form 8-K were filed during the fourth quarter of the
         year ended December 31, 2004.

Item 14.    Principle Accounting Fees and Services

     Reference is made to the Company's Proxy Statement to be used in
conjunction with the 2005 Annual Shareholders Meeting scheduled to be held on
May 25, 2005.





























                               SIGNATURES
                               ----------

     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized as of the
28th of March 2005.

                                 FOOD TECHNOLOGY SERVICE, INC.

                                 By: /S/Richard G. Hunter, Ph.D.
                                    ---------------------------
                                     Richard G. Hunter, Ph.D.
                                     Chief Executive Officer and
                                     Chief Financial Officer

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the Company
and in the capacities and on the dates indicated:

   Name                                Title                     Date
   ----                                -----                     ----

 /S/Richard G. Hunter, Ph.D.         Director                March 28, 2005
---------------------------
Richard G. Hunter, Ph.D.

 /S/ Samuel Bell                     Director                March 28, 2005
---------------------------
Samuel Bell

 /S/ David Nicholds                  Director                March 28, 2005
---------------------------
David Nicholds

 /S/ John T. Sinnott                 Director                March 28, 2005
---------------------------
John T. Sinnott, M.D., F.A.C.P

                                     Director                March 28, 2005
---------------------------
Michael W. Thomas

 /S/ Ronald Thomas                   Director                March 28, 2005
---------------------------
Ronald Thomas











                        FOOD TECHNOLOGY SERVICE, INC.

                        INDEX TO FINANCIAL STATEMENTS



Report of Independent Certified Public Accountants

Financial Statements:

Balance Sheet - December 31, 2004 and 2003

Statement of Operations - Years Ended December 31, 2004, 2003 and 2002

Statement of Stockholders' Equity - Years Ended December 31, 2004, 2003 and 2002

Statement of Cash Flows - Years Ended December 31, 2004, 2003 and 2002

Notes to Financial Statements






































                  REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS


To the Board of Directors
  and Stockholders
Food Technology Service, Inc.

     We have audited the accompanying balance sheet of Food Technology
Service, Inc. as of December 31, 2004 and 2003 and the related statements
of operations, stockholders' equity, and cash flows for each of the three
years in the period ended December 31, 2004.  These financial statements
are the responsibility of the Company's management. Our responsibility
is to express an opinion on these financial statements based on our audits.

     We conducted our audits in accordance with the standards of the
Public Company Accounting Oversight Board (United States).  Those
standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement.  An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation.  We believe that our audits provide
a reasonable basis for our opinion.

     In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Food
Technology Service, Inc. as of December 31, 2004 and 2003 and the results of
its operations and its cash flows for each of the three years in the period
ended December 31, 2004, in conformity with U.S. generally accepted accounting
principles.








FAIRCLOTH & ASSOCIATES, P.A.

Tampa, Florida
February 1, 2005
















                        FOOD TECHNOLOGY SERVICE, INC.
                             BALANCE SHEETS


                                                  December 31,
                                               2004          2003
                                               ----          ----


                              ASSETS

Current Assets:
  Cash                                      $231,877       $ 89,410
  Accounts Receivable                        135,946        152,620
  Inventory                                    5,557          2,690
                                            --------       --------


    Total Current Assets                     373,380        244,720
                                            --------       --------


Property and Equipment:

  Building                                  2,883,675     2,883,675
  Cobalt                                    2,675,756     2,675,756
  Furniture and Equipment                   1,739,717     1,728,817
  Less:  Accumulated Depreciation          (4,112,815)   (3,728,102)
                                            ---------     ---------


                                            3,186,333     3,560,146

  Land                                        171,654       171,654
                                            ---------     ---------

    Total Property and Equipment            3,357,987     3,731,800
                                            ---------     ---------


Other Assets:                                   5,000         5,000
                                            ----------    ---------


    Total Assets                           $3,736,367    $3,981,520
                                           ==========    ==========





                        SEE NOTES TO FINANCIAL STATEMENTS








                        FOOD TECHNOLOGY SERVICE, INC.
                              BALANCE SHEETS


                                                    December 31,
                                               2004               2003
                                               ----               ----


                    LIABILITIES AND STOCKHOLDERS' EQUITY


Current Liabilities:
  Accounts Payable and
       Accrued Liabilities                   $ 18,035           $ 34,199
  Financing Agreement Payable                 782,899            934,157
                                            ----------          --------
      Total Current Liabilities               800,934            968,356
                                            ----------          --------

Stockholders' Equity:
  Common Stock $.01 Par Value, Authorized
   20,000,000 Shares, Outstanding
   11,001,038 Shares in 2004 and in 2003      110,010            110,010

  Paid-In Capital                          11,975,577         11,975,577
  Deficit                                  (9,122,154)        (9,016,423)
                                           ----------         ----------

                                            2,963,433          3,069,164

Less-Common Stock Issued for Receivables      (28,000)           (56,000)
                                           ----------          ---------

      Total Stockholders' Equity            2,935,433          3,013,164


Commitments and Contingencies
  (Notes B, H  and I)                             -                  -
                                           ----------          ---------
      Total Liabilities and
            Stockholders' Equity           $3,736,367         $3,981,520
                                           ==========         ==========





                        SEE NOTES TO FINANCIAL STATEMENTS










                       FOOD TECHNOLOGY SERVICE, INC.
                          STATEMENT OF OPERATIONS


                                                Year Ended
                                                December 31,
                                2002                2003                 2004
                                ----                ----                 ----



Net Sales                   $1,198,151           $1,875,994          $1,318,268
                            ----------           ----------          ----------
Processing Costs               369,399              385,177             359,286

Selling, General and
  Administrative               707,904              650,335             631,258

Depreciation                   313,888              380,446             384,713

Interest Expense                68,734               62,556              48,742
                            ----------           ----------          ----------
                             1,459,925            1,478,514           1,423,999
                            ----------           ----------          ----------

Income (Loss) before
     Income Taxes             (261,774)             397,480            (105,731)

Income Taxes                                        151,000
                            ----------           ----------          ----------
Income (Loss) before
  Benefit of Tax Loss
  Carryovers                  (261,774)             246,480            (105,731)

Benefit of Tax
  Loss Carryovers                                   151,000
                            ----------           ----------          ----------
  Net Income (Loss)          ($261,774)            $397,480           ($105,731)
                            ==========           ==========          ==========
Net Income (Loss) Per
  Common Share                 ($0.025)              $0.036             ($0.010)
                            ==========           ==========          ==========






                        SEE NOTES TO FINANCIAL STATEMENTS







                        FOOD TECHNOLOGY SERVICE, INC.
                     STATEMENT OF STOCKHOLDERS' EQUITY


                                    Common          Paid-In
                                     Stock          Capital          Deficit
                                    ------          -------          -------


Balance, December 31, 2001          $104,968      $11,680,619     ($9,152,129)

  Issuance of 504,201 Shares
    of Stock for $300,000 of Debt      5,042         294,958

  Net Loss for Year                                                  (261,774)
                                    --------       ----------      ----------
Balance, December 31, 2002           110,010       11,975,577      (9,413,903)


  Net Income for Year                                                 397,480
                                    --------       ----------      ----------

Balance, December 31, 2003           110,010       11,975,577      (9,016,423)

  Net Loss for Year                                                  (105,731)
                                    --------       ----------      ----------
Balance, December 31, 2004          $110,010      $11,975,577     ($9,122,154)
                                    ========       ==========      ==========



















                        SEE NOTES TO FINANCIAL STATEMENTS






                        FOOD TECHNOLOGY SERVICE, INC.
                          STATEMENT OF CASH FLOWS

                                             Year Ended December 31,
                                      2002              2003             2004
                                      ----              ----             ----

Cash Flows from Operations:
  Cash Received from Customers   $1,173,925        $1,927,395       $1,334,732
  Interest Paid                      (3,044)          (15,983)
  Cash Paid for Operating
    Expenses                     (1,036,993)       (1,034,605)        (981,365)
                                 ----------        ----------       ----------
                                    133,888           876,807          353,367
Cash Flows from Investing:
  Purchase of Equipment and Cobalt   (8,536)         (861,155)         (10,900)
                                 ----------        ----------       ----------
                                     (8,536)         (861,155)         (10,900)

Cash Flows from Financing Activities:
  Proceeds from Sale of
    Common Stock                     93,460
  Payment of Loans                 (250,000)                          (200,000)
                                 ----------        ----------       ----------
                                   (156,540)                          (200,000)

Net Increase (Decrease) in Cash     (31,188)           15,652          142,467

Cash at Beginning of Year           104,946            73,758           89,410
                                 ----------        ----------       ----------
Cash at End of Year                $ 73,758           $89,410         $231,877
                                 ==========        ==========       ==========

Reconciliation of Net Loss to Net Cash
  Provided (Used) by Operations:
  Net Income (Loss)               ($261,774)         $397,480        ($105,731)

Adjustments to Reconcile
  Net Income (Loss) to Cash
    Provided or Used:
  Depreciation                      313,888          380,446           384,713
  Non Cash Payments of Interest
     and Salaries                    93,690           74,573            76,742
  (Increase)Decrease in Receivables (24,227)          51,400            16,674
  (Increase) Decrease in Inventory  (10,691)          16,070            (2,867)
  Increase (Decrease) in
     Payables and Accruals           23,002          (43,162)          (16,164)
                                 ----------        ----------       ----------
Net Cash Provided (Used) by
     Operating Activities          $133,888         $876,807          $353,367
                                 ==========        =========        ==========
                        SEE NOTES TO FINANCIAL STATEMENTS






                        FOOD TECHNOLOGY SERVICE, INC.
                         STATEMENT OF CASH FLOWS


Supplemental schedule of non-cash investing and financing activities.

The Company issued 504,201 shares of common stock for debt of $300,000 in 2002.

The Company also converted $65,690, $46,573 and $48,742 of interest expense
to debt in 2002, 2003, and 2004 respectively.

Also receivables of $28,000 per year were forgiven for services in 2002, 2003
and 2004 (See Note C).






























                        SEE NOTES TO FINANCIAL STATEMENTS











                        FOOD TECHNOLOGY SERVICE, INC.

                        NOTES TO FINANCIAL STATEMENTS
                             December 31, 2004

Note A - Summary of Significant Accounting Policies:

A summary of the Company's significant accounting policies consistently applied
in the preparation of the accompanying financial statements follows:

1.  Nature of Business

The Company was organized in December 1985 to engage in the business of
operating a gamma irradiation facility using Cobalt 60 to extend the shelf life
of and/or disinfect fruits, vegetables and meat products and for the
sterilization of medical, surgical, pharmaceutical and packaging materials.

2.  Use of Estimates

Management uses estimates and assumptions in preparing financial statements in
accordance with generally accepted accounting principles.  These estimates and
assumptions affect the reported amounts of assets and liabilities, the
disclosure of contingent assets and liabilities, and the reported revenues and
expenses.  Actual results could vary from the estimates that were assumed in
preparing the financial statements.

3.  Fair Value of Financial Instruments

The fair value of financial instruments has been valued at the prevailing
prime interest rate plus 1%.  The fair value approximates the carrying amount
of debt.

4.  Revenue Recognition

Sales are recorded by the Company when the customer's product has been
processed.

5.  Research and Development Costs

Research and development costs are charged to expense as incurred.  Such costs
have not been significant to date.

















                        FOOD TECHNOLOGY SERVICE, INC.

                        NOTES TO FINANCIAL STATEMENTS
                             December 31, 2004

Note A - Summary of Significant Accounting Policies (continued):

6.  Depreciation

Assets other than Cobalt have been depreciated using the straight-line method
over the following lives for both financial statement and tax purposes:

     Building                     31.5 Years

     Furniture and Equipment      5-15 Years

Cobalt has been depreciated using engineering estimates from published tables
under which one-half of the remaining value is written off over 5.26 year
periods.

Estimated useful lives are periodically reviewed and if warranted, changes will
be made resulting in acceleration of depreciation.

7.  Net Loss Per Share

Basic net loss per share is computed using the weighted average number of
common shares outstanding.  Diluted earnings per share are not presented
because the result of using common stock equivalents in the computation is
antidilutive.

8.  Comprehensive Income

The only component of comprehensive income the Company has is net income.

9. Stock Option Plans

The Company has various stock option plans for employees and other individuals
providing services to or serving as Directors of the Company. (See Note G ) The
Company accounts for these plans under the recognition and measurement
principles of APB No. 25, and related interpretations.  Accordingly,
compensation expense is recognized only when options are granted at an exercise
price below the market price at date of grant.

If the fair value method described in SFAS No. 123 (R) had been adopted, the
net impact on the 2002, 2003, and 2004 net income would not have been material.
As required by FASB 123 (R) the Company plans to apply the Statement in
December 2005.











                        FOOD TECHNOLOGY SERVICE, INC.

                        NOTES TO FINANCIAL STATEMENTS
                             December 31, 2004



Note B - The Company as a Going Concern:

Management is of the opinion that the Company will continue operations through
December 31, 2005 based on the following:

The Company's cash flows from operations have been $133,888, $876,707, and
$353,357 for 2002, 2003, and 2004, respectively.

The Company's supplier (Note D) and major creditor, MDS Nordion (Nordion),
has guaranteed a line of credit of $500,000 from a bank.  Any future draws
against this line must be approved by Nordion.  At December 31, 2004,
$500,000 of this amount is available to fund 2005 operations.

The Company anticipates that revenue from processing food, packaging
materials, medical supplies and other products, together with its unused
credit line of $500,000, will be sufficient to cover operating costs through
December 31, 2005.

Note C - Receivables from Directors and Employees:

Pursuant to an employment agreement the Company issued 80,000 shares of
common stock to its President for a receivable of $112,000.  Such amount
is being forgiven $28,000 a year and being charged to expense over a four
year period, which commenced September 1, 2001. The receivable has been
recorded as a reduction to equity pending collection or expensing.

Note D    Financing Agreement:

Financing agreement to Nordion due on
demand plus interest at 1% over prime                    $  463,194

Accrued interest                                            319,705
                                                         ----------
                                                         $  782,899
                                                        ===========

At December 31, 1999 the Company owed Nordion, $378,598 (payable in
Canadian currency), $375,732 in cash advances and $200,146 in accrued
interest totaling $954,476. Such debt was all due January 5, 2001.










                        FOOD TECHNOLOGY SERVICE, INC.

                        NOTES TO FINANCIAL STATEMENTS
                             December 31, 2004

Note D   Financing Agreement (continued):

On March 6, 2000, as amended on May 18, 2000 the parties agreed to simplify
and consolidate the debt as follows.  The total amount of the indebtedness at
February 4, 2000 was $963,194 in U.S. dollars, which included $22,114
accrued interest.  The parties further agreed that the payable debt, interest
accruing thereon, and any future advances remain, at Nordion's option,
convertible at any time into common shares of the Company at 70% of the market
value at date of conversion.  Nordion has agreed to waive its rights to
convert interest accruing on the indebtedness from February 5, 2000
through January 1, 2006.

Effective December 17, 2002 Nordion converted $300,000 of debt for 504,201
shares of stock. Such amount was 70% of the closing market price on
December 16, 2002.

All assets of the Company collateralize all sums advanced by the supplier,
including accrued interest.

Note E - Income Taxes:

The Company has unused operating loss carry forwards available at December 31,
2004 of $8,977,189 for tax and financial reporting purposes.  The loss
carry forwards expire as follows:

                                    Amount
           Year                     Tax                      Book
           ----                     ---                      -----
           2006           $      156,162            $      137,432
           2007                1,352,015                 1,352,015
           2008                1,297,455                   945,703
           2009                1,239,590                 1,239,696
           2010                1,262,386                 1,292,314
           2011                1,048,800                 1,065,209
           2012                  688,497                   983,017
           2018                  647,342                   573,699
           2019                  840,410                   881,875
           2020                   86,215                   147,912
           2022                  256,356                   256,356
           2024                  101,961                   101,961
                           -------------             -------------
                           $   8,977,189             $   8,977,189
                           =============             =============

Deferred income taxes reflect the estimated tax effect of temporary differences
between assets and liabilities for financial reporting purposes and those
amounts as measured by tax laws and net operating losses.  The components of
deferred income tax assets and liabilities at December 31, 2004 and 2003 were
as follows:





                        FOOD TECHNOLOGY SERVICE, INC.

                        NOTES TO FINANCIAL STATEMENTS
                             December 31, 2004

Note E   Income Taxes (continued):

                                         2004                 2003
                                         ----                 ----
Net operating loss carry forwards    $3,378,116            $3,339,748
                                     ----------            ----------
        Net deferred tax assets       3,378,116             3,339,748
                                     ----------            ----------
        Less - Reserve               (3,378,116)           (3,339,748)
                                     ----------            ----------
                                     $        0            $        0
                                     ==========            ==========

The net deferred tax assets have been fully reserved because there is less
than a 50% chance that they will be utilized.

Note F - Stock Purchase Warrants and Stock Options:

On June 23, 2000 the Stockholders approved the 2000 Incentive and
Non-Statutory Stock Option Plan (the 2000 Plan).

The Plan is administered by the Board of Directors who are authorized to
grant incentive stock options (ISO's) or non-statutory options (NQO's), to
Officers and employees of the Company and for certain other individuals
providing services to or serving as Directors of the Company.

The maximum number of shares of the Companys Stock that may be issued under
the 2000 Plan is 500,000 shares of which options to purchase 202,000 shares
were granted in 2001, 20,000 were granted in 2002 and 60,000 were granted in
2003.  Under this plan, no shares were issued in 2004.

The aggregate fair market value (determined at the time an ISO is granted) of
the Common Stock with respect to which ISO's are exercisable for the first time
by any person during any calendar year under the Plans shall not exceed
$100,000.  Any option granted in excess of the foregoing limitation shall be
specifically designated as being a NQO.

The options are exercisable 20% of the authorized amount immediately and 20% in
each of the following four years.  ISO's and NQO's granted to an optionee
terminate 30 to 90 days after termination of employment or other relationship,
except that ISO's and NQO's terminate the earlier of the expiration date of the
option, or 90 to 180 days in the event of death and 180 days to one year in the
event of disability.

On February 9, 1999 the Board of Directors approved an option plan for non-
employee Directors.





                        FOOD TECHNOLOGY SERVICE, INC.

                        NOTES TO FINANCIAL STATEMENTS
                             December 31, 2004


Note F   Stock Purchase Warrants and Stock Options (continued):

Such plan, as amended on May 18, 2000, grants options to Directors on the date
a Director is elected at the average quoted market price for the five days
preceding the date of grant.  Such options may be exercised after one year and
no more than 10,000 shares may be granted to each Director per year. The plan
was further amended on March 1, 2001 to grant each non-employee Director
options to purchase 6,000 shares annually at the market value on the date of
grant.  On May 2, 2002 and May 21, 2003 options to purchase 18,000 shares
at $.91 and $1.02 per share, respectively, were granted to three Directors and
on May 26, 2004 an option to purchase 6,000 shares at $1.24 per share was
granted to a Director.

Changes that occurred in options and warrants outstanding are summarized below:


                                 2004                2003                2002
                                 ----                ----                ----
                              Average              Average              Average
                              Exercise             Exercise             Exercise
                     Shares     Price     Shares     Price     Shares     Price
Outstanding at
beginning of year    293,056   $1.90     216,556    $1.90     182,556     $2.11

Granted                6,000   $1.24      78,000    $0.99      38,000     $0.99

Exercised                -       -          -         -          -           -

Expired/canceled     (48,200)  $2.43      (1,500)   $0.55      (4,000)    $2.75

Outstanding at
end of year          250,085   $1.45     293,056    $1.90     216,556     $1.90

Exercisable at
end of year          174,856   $1.54     124,556    $1.81      71,156     $2.91



















                        FOOD TECHNOLOGY SERVICE, INC.

                        NOTES TO FINANCIAL STATEMENTS
                             December 31, 2004

Note G - Related Party Transactions:

The Company's supplier of Cobalt and major creditor, Nordion
owns approximately 32.4% of the Company's outstanding common stock (see
Note D for financing arrangements).

During 2003 the Company purchased 600,000 curies of Cobalt 60 from Nordion for
$861,155 in cash.

Note H - Concentration and Credit Risk:

Although the Company continues to diversify its customer base three customers
accounted for approximately 56% of revenues in 2004.

The Company's cash and accounts receivable are subject to potential credit
risk. Management continuously monitors the credit standing of the financial
institutions and customers with which the Company deals.

Note I - Commitments and Contingencies:

On March 24, 2000, Pegasus Foods Canada, Inc. filed a lawsuit against the
Company alleging that certain seafood products irradiated by the Company were
adversely affected by the process.  The lawsuit alleged damages in excess of
$2,000,000 and lost profits in excess of $6,000,000.  The Company denied the
allegations and has vigorously defended the lawsuit. On February 23, 2004, the
Company executed a confidential settlement agreement with the plaintiff, which
in the opinion of counsel, concludes the litigation and protects the Company
against any significant financial exposure.